Oil refineries

Think about this! Little has been said in the GAO reports about the oil industry other than to say that we the US has a 2 month reserve of crude oil stored. (Likely more than that by now, as that was not the most recent report)That may sound comforting,and seems to pacify people into not looking beyond the crude oil requirements. What REALLY WORRIES me is the real lack of information about the true readiness of oil refineries. We can have all the crude oil in the world, but if the refineries are unable to produce the various fuels we will be TREMENDOUSLY IMPACTED in a long list of industries that require refined products. Yes, refineries in turn have large storage tanks, so the impct will not be felt immediately. However, if you think about it, seek out expert advice about oil refineries from people in the know on the inside, it is my strong suspicion that you will find that the oil refineries are far too huge, complex and contain so many many older and imbedded computer chips that they are NOT, nor will be anywhere able to produce. If I am correct in my assumption, it will be the quantity of refined oil storage rather than the quantity of crude oil storage that will be the buffer between availability of fuels to drastic decrease if not total deficiency of refined products.
That of course would grind to a halt airlines, power plants relying on fossil fuels, many chemical industries reliant on oil products. The list goes on and on. My feeling is that OIL REFINERIES' ability to operate or NOT OPERATE, (more importantly)is going to have BY FAR THE MOST DEVASTING IMPACT on the U.S. as well as the rest of the world in times to come. Obviously this will not be felt Jan.1st, but it is just a matter of time before the truth has nowhere to hide.
This is a huge industry. Surely among your subscribers there are people knowledgabe in this field that could shed some light into this abnormally quiet area of information. Please submit to me at my e-mail sight as well as TimeBomb 2000!

---for what it's worth department: as part of my "research" into y2k, I
talked to a fella worked in a refinery. He said-I'll paraphrase this,
it was two years ago-IF they have to go to manual controls, and IF the
refinery is more or less intact itself, and IF they have power, that
with 100% of the workers living round the clock at the plant, they can
maybe do around 10% of normal output. His take was that there where way
too many automated systems that have potential chip problems, and that
most likely you would get zip fuel, at the best, and at the worst, the
place might self destruct. He's been preparing big time, and won't be
at work the last few weeks of the year.......

The consultant's analysis suggests that we'll have between 24% and 36%
of our current oil supply (gasoline, fuels, etc.) a few weeks into
2000. Another comment by the consultant -- "We have 3 or maybe 3-1/4
DAYS of gasoline available." Another: The strategic oil supply
(supposedly 3 months of poor crude oil) can't be pumped out of the
salt caves fast enough to supply our needs, even assuming all
refineries are running and could process that kind of crude oil.

There was a lot more, but those were the points that caught my
attention.

Crudes from certain fields and countries have properties which make
them useful for specific puposes. Some for asphalt production, some
for other applications, and very few are of the quality necessary for
lubrication grade.

Also, a refinery is specifically set up to run certain crudes. It
might be a West Texas crude, a Venezuelan crude or a crude from
Mexico. Each crude is different and requires different methods to
refine it into products.

1) I've been in the refining end of the oil biz (trading and
marketing NOT chem engineering or IT), and I can firmly relay that
the oil industry is not expecting any big refining problems. All this
FOF commentary is over played on this forum. They'd done
statistically sampling. They have NOT found extensive chip problems
according to the people I've talked to and industry publications.
Maybe its a masterful spin job but I doubt it.

2) There's hundreds of very asstute individuals, many of which have
technical backgrounds, that are involved in the spot and futures
markets trading of oil and oil products. If the industry or any given
company knew they had big pending refining problems, they'd be all
over the disparity in market values. The crack spreads, that reflect
refiner's margins, have recently been at near all time lows on
distillate (heating oil and diesel) and moderately below average on
gasoline. The markets are NOT reflecting any big rollover refining
risks and many of these people who participate in these markets are
far more knowedgeable than we are on this partiular subject.

I have to agree with Downstreamer. My knowledge is from personal
experience and as a Chemical engineering consultant to refineries.
Most refineries have the capability to operate their processes
without the computer control systems (and some refineries don't yet
have computerized control systems!). Those that don't surely have
addressed their control systems as it is the crux of their facility.
The computers basically allow for optimization of the processes.
Additionally, a mid-sized refinery in the US recently conducted a
test of their computerized control system (the most common brand in
use) with the system's manufacturer on site. The test was conducted
while half of their plant was shut down (minimizing potential
impacts). Although there were some minor operational problems, the
facility continued to run without the need for shutdown or curtailed
operation.

The oil refineries I've talked to have been addressing the Y2K
problems for several years now and are Y2K ready, either through
replacement, workarounds, or contingency plans. Additionally, most
are planning on having extra operating and engineering staff on hand
despite all their progress. I'm not trying to say that nothing is
going to go wrong, but what does happen should be minimal and result
in a safe shutdown at the worst. (Note that refineries experience
problems such as power failures all the time, sometimes as frequently
as 4-5 times a year.)

I've broached this subject from time to time on this forum since last
summer. I did so after having bumped into a lot of Oil industry folks
while on business trips around the country in the previous 6 month
period and hearing their stories and evaluations. These fellows tell
an entirely different story than what Downstreamer or Larry are
saying. This is not to say that I haven't heard some fellows talk
like Downstreamer of Larry.

What is interesting is that the folks who told me "its no big deal,"
or "all is ok"... were the ones who didn't know the first thing of
what they were talking about. They were only spouting off the company
line in complete ignorance. Many were the bosses who were either
clueless or were in the midst of making desperate moves and rolling
dice on gambles that type-testing would bail them out of a Y2K jam.
Plus, there are lot of chips out there thought NOT to have any dates
in them but actually do because they were "subbed" by the mfr with a
dated-stamped chip, or that are connected surreptitiously to a date
stamped system that was specially custom-wired by the engineer but
wasn't market on the schematics cause it was done on-site on-the-fly
in a hurry. Not everyone in the oil biz realizes this happened or that
it was as frequent as they'd like to admit or hope. This is why
ENRON has made the full disclosure on their 10-Q... frankly all
the rest of these oil company executives need to be prosecuted to
the fullest extent of criminal law for their fraudulent and misleading
10-Q statements that fail to disclose the full risks like ENRON...and
ENRON states in their 10-Q that ALL OTHER OIL co.s are in the same
boat on this and have the same exact risk problems regarding testing.

In other words folks, the oil industry is really only about 10% done
not 90%... in reality they've LIED to you big time with smoke and
mirrors about how they've handled their embeddeds problems.

These guys are clueless for the most part about anything connected to
Y2K. I say that because I'd also end up talking to other guys who
were actually doing the Y2K remediation who would tell a totally
different story.

Furthermore, they would indicate that only a small fraction of the
systems were even being looked at. Furthermore, no real testing was
being done live and online because they'd have to shut down the
refinery and run a HIGH risk of losing the refinery for 30-90 days
of NO production if it blew out a critical embedded part. THUS MGMT
made one of those executive decisions not to do things the right way
but rather to slough things off and keep the production lines going
to keep quarterly reports as hefty as possible, especially when crude
prices took a severe tumble.

Bench type-testing is all that has been done.... Funny thing is that
the embedded consultants have told them that the odds are about like
rolling the dice for a failure and the maker if still around refuses
to honor any warranties for bench testing! In other words, these guys
have been told that bench testing is insufficient and places the
whole operation at a 50/50 risk...but full testing does risk
significant downtime production losses prior to Y2K, unacceptable to
mgmt. For more on why bench-testing is a joke, see Bruce Beach's
extensive report on his in-the-field surveys regarding embedded
systems in the gas and chemical refineries. The link is given along
with the others below.

Let me say this regarding Downstreamer and Larry. Unless you're an
operating engineer on those units climbing the riggings you don't know
the first damn thing of what you're talking about regarding the subtle
nuances of Y2K. That's the word from some of my sources who've advised
me on the Y2K issues.

Deskbound engineers and lab techs have major limitations in under-
standing the technical aspects of embedded problems inside the lines.
My sources are the folks who put their lives on the line every minute
of every hour that they are at work. One mis-step by these guys could
kill deskbound engineers sitting in a cushy office a few blocks away
or over in a nearby lab.

When a "cat-cracker" blows sky high, depending on wind conditions it
can have an effect similar to a nuclear blast w/o the radiation. I
know, (yrs ago) my father just missed an event like that by a few
minutes as he'd already clocked out and gone home. Fortunately the
wind was out of the South direction and the force of the blast didn't
carry into the critical portion of the cat. As it was, the blast
shook buildings 50 miles away, I don't know how far it would've been
felt if the wind had been out of the North. I was about 3 mi away and
it just about knocked you to the ground. So, refineries were
dangerous 50, 40, 30, 20 & 10 years ago and STILL ARE to this day.

Right now, behind the scense, Oil co. contingency planners are
scrambling to prepare for a variety of contingencies among which the
safety hazards are a chief worry. I've got one source in such a
position doing Y2K prep for a major oil co. and they're concerned
with major safety risks so don't let these other fellows mislead you.
There isn't one major oil co. exec that is not now sweating bullets
over Y2K related issues. They had no idea of how serious a problem it
could be until about summer of 98 when they got an "inkling" then
they got somewhat concerned around Christmas of 98, a lot of
companies hit the panic mode and within 3 months thought it was all
better and have remained that way until about the past 3 weeks or so.
I guess someone finally reported to the top of the castle echelons
that their approach to embeddeds does indeed have alot more downside
risks than having done proper testing that risked a production
stoppage that might last 90 days or so. From what I'm hearing some of
the real movers and shakers are now starting to get the Y2K religion
while other top execs are still left totally in the dark about the
Y2K embedded's problems... Most of these guys apparently are thinking
or else just pretending that all embeddeds have been physically
tested and found to be ok or were replaced. This IS Categorically
untrue...and probably, only about 5% to 30% of all systems were ever
tested for possible problems...which leaves anywhere from 95% to 70%
of systems as being totally unknowns???? I'll deal more on this
in a later post perhaps.

Now, having said all of that, does this mean that all refineries will
go down? Perhaps, and then again perhaps not. We don't know for sure.
HOWEVER, the ODDS are strongly in favor of problems and substantial
risks still persist for extremely significant problems to develope.
Will they? Perhaps. Must they? NO. Must the rollover be only a bump
in the road? I'd say the odds of a BITR for the Oil Industry are about
1 in a 100.
Here are some but not necessarily all of the TB 2000 threads on oil
in threads dating to last summer. There's probably more but I just
didn't get them all copied.

Oil/Gas are the real problems in Y2K?
http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000xLU

Did some Polly's want names and proof that the oil industry is in
trouble?
http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0010Vc

That's interesting that your co. is "adding" new systems...Supposedly
most are now cutting off any new changes to the system so that they
don't introduce any new bugs into the remediated system. It sounds
to me like your co. is sooooo far behind that they're scrambling to
replace instead of remediate. Sounds like they're "toasted" already.

I didn't mean to imply that we are adding new systems. Quite
the contrary. We're locking down. But suddenly on our Y2K database,
it indicates that we've discovered new mission critical systems to
investigate and remediate, if necessary. Some of this appears to be
because of a recent purchase we made of some offshore platforms from
another company. There are some embedded systems on them that we are
not familiar with.

Perhaps a quick determination can be made
whether these systems are ok. If they're not, we're probably hosed.
Too little time.

But as I've posted before, we've only done a
spot check on our embeddeds anyway. There never was enough time to
test each component. Totally unrealistic.

So....Dog Gone & RC: Any more news on those Saudi oil ports?
Heard anything from your sources about their water purification
(saline) systems?? Hope you can keep us up-dated as your sources
will allow.

Nothing new on the ports specifically. However, the audit of the
Saudi telephone system indicates that only 23 of the 45 critical
COBOL applications there will make it. ARAMCO doesn't have its own
phone network.

Think of the bright side, though. Demand for mid-
east oil will go down if the grid goes off and the refineries shut
down.

Thanks for the clarification. I wasn't sure what you meant, which is
why I posted as I did. I also find your follow up comment equally
fascinating:

"But as I've posted before, we've only done a spot check on our
embeddeds anyway. There never was enough time to test each component.
Totally unrealistic."

Yes, this is what I'm hearing also from my oil industry contacts
across the industry. If I'm understanding you correctly, you're
saying that your oil company only did "type-testing". Is that correct?

BTW... have you seen the threads up above about the embeddeds debate
started by Shuggie...the pollie who thinks things are "no big deal"?

That guy doesn't have a "clue" regarding embedded systems in the oil
and petrochemical industries. Might do some good if you'd go up there
and chime in with what is really happening in your firm. I can't
believe that the pollies have come back for a concerted attack on
this issue at this late date... I guess I need to report the Baker
Hughes Inc. website lists of non-compliant products that they're
selling or attempting to remediate.

Thanks again for your input.

TO JEANNE: -- I've not heard anything more on Saudi Arabia other
than the source that Dog Gone (or somebody) here has posted. I
suspect that there's no good news to report from that country.